The U.S. Federal Communications Commission needs to pass strong new net-neutrality rules to prevent small technology entrepreneurs from being crowded out of the market by large broadband providers, U.S. Senator Ron Wyden said Wednesday.

“I think there are storm clouds ahead that could close the doors of [the technology] marketplace to future innovation,” said Wyden, an Oregon Democrat. “The continued growth of the Net right now is being hampered by the lack of clear, enforceable standards on net neutrality. I don't think the country can afford that in these kinds of difficult economic times.”

Wyden, speaking during the Computer & Communications Industry Association’s (CCIA) Washington, D.C., caucus, called on the FCC to develop more definite net-neutrality rules beyond the case-by-case enforcement that the agency is taking now. Wyden and other backers of net neutrality rules say there need to be stronger policies against broadband providers blocking or slowing Web content from competitors of themselves or their partners.

Wyden's call for stronger rules bucks the status quo in which the FCC has taken enforcement action against two broadband providers for violations of its Internet policy statement, saying broadband consumers should have the right to access any legal Web content and attach any legal devices to the network. Most recently, the FCC in mid-2008 prohibited Comcast from slowing peer-to-peer traffic in an effort to manage network congestion.

Several other congressional Democrats have called for stronger net-neutrality rules, but there have been no active legislative efforts so far this year.

But Comcast questioned if the FCC has the legal authority to enforce a policy statement, and Wyden suggested a more definitive net-neutrality policy is needed. Without strong rules, venture capital firms will hesitate to fund small entrepreneurs when there's no guarantee that their products will be available to Internet users, Wyden said.

“The funders want evidence that [entrepreneurs’] ideas aren't being locked out of the marketplace,” Wyden said. “Without clear and enforceable standards, the Net in my view is no longer an open marketplace.”

Wyden, a member of the Senate Judiciary and Finance committees, said net neutrality advocates need to challenge the FCC to adopt stronger rules.

“We’ve got to make sure the Net is protected from the ever-present impulse of [broadband] companies who would like to take advantage of their position as a middleman to erect ... barriers for their own benefit,” he said. “It is critical to create jobs and benefits for everybody in every nook and cranny in this country, and not just for the fortunate few.”

T-Mobile is investing billions of dollars to launch a wireless broadband network in the U.S., Sugrue added. “Managing a wireless broadband network ... is very challenging,” he said. “There are some legitimate issues on the network management side.”

Sugrue urged Wyden and Congress to “do no harm” to broadband services in its drive to pass net neutrality rules.

Wyden said he normally takes a hands-off approach to Internet regulation, but problems with net neutrality are becoming a crisis. Marketplace uncertainty caused by the lack of strong net-neutrality rules is the “single greatest threat to the health and welfare of the Net,” he added.

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